May 25 Time for the Left to Give Up Rank Stupidity on Federal Spending

Some people are upset White House is answering their critics on government spending by... setting the facts straight (quick, gasp loudly!). No, not talking about just the Republicans here. The facts also seem to be upsetting the elite Professional Lefties in media and the blogosphere.

But being the sucker that I am for facts, I'm going to go to them first. Under President Obama, federal spending has essentially flatlined, and the federal budget deficit is smaller now than it was when he took office. Marketwatch released the a graph to make the point, showing federal spending under Bush and Obama, while TPM modified another chart from Marketwatch to color-code them (I assume so that Republicans can better understand it - they do love their color codes).

Awesome, right? President Obama has pulled us out of the worst recession in history except for the Great Depression, and he did it without increasing overall federal spending, like, at all.
But but but. There's always a but. Neither side's ideologues are ready to accept what these two charts as a whole represent. The Right wing ideologues are not able to concede the simple fact that this president has actually flatlined federal spending. It doesn't fit their narrative. They are still running around lying about it. The Left's own shade of ideologues have a different problem with these two charts: what these charts represent also doesn't fit their narrative. Which narrative: one that says government spending - as a whole, not specific kinds of spending, but government spending as a whole - always grows the economy. It's not really an narrative of its own, mind you. It's merely a counternarrative to the Right wing's "spending alwayz suckzzzz" narrative. And so the Left's ideologues have developed the "Spending is alwayz awesomezzzzz" narrative.

Right on cue, David Firestone, the Editorial page editor for the New York Times has jumped on the White House for correcting the record, saying the president should not "brag" about spending cuts, because that's just capitulating to right wing talking points. And right on cue, Firedoglake's resident news-putz David Dayen has picked up the piece as vindication of the whining champions - see, we told you Obama is a Republican!

Mr. Carney said this proves the president has demonstrated far more restraint and responsibility than his critics would allow.

“Do not buy into the b.s. that you hear about spending and fiscal constraint with regard to this administration,” he demanded. “I think doing so is a sign of sloth and laziness.”

This trumpet blast would seem to indicate that Mr. Carney has bought into a standard Republican line: restraint is good and spending is bad, even when government dollars are desperately needed by a struggling economy. When Mitt Romney and other Republicans claim the president is a big spender (as they do every waking minute), the administration’s first instinct is to say they’re wrong on the facts, not that they’re wrong on the principle.

Oh no, facts! How dare the administration try to correct their critics on the facts!!!! First of all, Mr. Firestone, when Mitt Romney and other Republicans claim that the president is a big spender (as they do every waking minute), they are claiming something as fact, so yes, the correct response to that would be that they're wrong on the ... you know... facts. By the way, if all you media types were a bit more concerned about those pesky facts rather than drowning in ideological idiosyncrasies, you'd do the American people a great service.

Second, watch how Firestone attributes things to Carney that he never once uttered - apparently simply by pointing out that the Republicans are lying, Firestone claims that Carney is buying the whole Republican line that "spending is bad, even when government dollars are desperately needed by a struggling economy" hook, line and sinker. I suppose nothing short of a "Yeah, the Republicans are wrong, but boy do we wish they were right" response would quench the thirst of these ideological warriors.

Ideologues on both sides are, of course, wrong. If blindly spending more were the way to economic prosperity, where was the Bush boom? Or for that matter, how was it that under Clinton, the economy grew by leaps and bounds, incomes rose, and 7 million people were pulled out of poverty, despite the fact that under Clinton, spending rose far more slowly than under Reagan, and either of the two Bush's? Doesn't work so well with the ideologically colored glasses, does it?

So what gives?

Firestone does put a finger on the real issue, before missing out on it completely. It's that "when government dollars are desperately needed by a struggling economy" part. It's not just when government dollars are needed, but specifically where it is needed. For example, throwing a truckload of money at defense contractors raises government spending, and thus inflates the size of the GDP, but it doesn't spur new industry, doesn't help anyone outside the defense contracting business, and doesn't give us the engine for the next economic growth. But use a fraction of that cash to help students afford college, and you have the next generation of inventors and innovators.

The fact that gets lost in this "yes, spend; no, cut" screamfest is that not all government spending is created equal. Let's reach back into recent history and pull out another very handy chart to help us understand what kind of government spending helps a depressed economy. Here's a chart from Moody's Mark Zandi, showing objective estimates of how much economic activity each federal dollar spent generates in different areas of spending:

Let's now see what has happened to these targeted areas of stimulus under President Obama.

More recently, means-tested spending increased from about $477 billion to $626 billion in the three years of the Obama administration, an increase of about 31 percent. [...] Many programs, including SNAP, increased automatically when poverty rose during the recession. In addition, spending on a host of poverty programs, again including SNAP, was boosted still further by temporary provisions in the 2009 American Recovery and Reinvestment Act (ARRA).

The Recovery Act also boosted SNAP spending by 15% per household. Note also that under the debt ceiling deal, programs for the poor are protected from the automatic cuts.

Extending unemployment benefits: President Obama has extended unemployment benefits throughout the end of 2012 - consistently since he came into office. What's more, the most recent extension added programs and funds to assist people to transition to work. Total federal spending for these extensions: $150-$200 billion (from different estimates and CBO estimates of costs of bills extending the benefits).

Infrastructure and manufacturing: The Recovery Act alone added $100 billion in federal investments in infrastructure and transportation boost - the largest singular investment in infrastructure since Eisenhower built the interstate highways. That investment alone accounted for 1.1 million jobs. Since then, the President has protected infrastructure investments through his battles with Republicans, including during the debt ceiling debacle.

Here, we should also note the massive investment in the American auto industry, which is hardly counted under "spending", since it was done through loans that have mostly been paid back. Most recent estimates are that of the $82 billion in government cash, taxpayers will recollect all but $14 billion of it.

Additional aid to states:$87 billion in the ARRA, plus $26 billion in an additional funding bill passed in August of 2010 by a Democratic Congress and signed by President Obama. That's $113 billion in additional funding over 2 years for states. Compare this with the baseline spending of about $127 billion yearly to states, and this is an increase of well over 40%.

Payroll tax holiday? Do I even need to remind people that it was this president that put in place the first tax cut for the working poor in a long time in the form of the reduction in payroll tax rates? Come to think of it, it is actually the same Lefty ideologues that are now bitching about not enough spending that opposed this specific spending.

So if you go through exactly what kind of spending helps the economy, all of that increased - and increased significantly, if not dramatically - under President Obama. So what did he do to offset that spending so that overall spending is essentially flat?

Where to begin, where to begin. Oh, I know! He ended the war in Iraq, for example. That's about $80-$100 billion a year. He's drawing down in Afghanistan. Pretty sure that's saving some money too. He cut out the banks from federal student loans, which helped the federal government expand help to students without actually spending more! Oh, and the Affordable Care Act cut extra subsidies to insurance companies, saving the government some $500 billion over 10 years. And he's making companies compete for Medicare's business. He froze some spending, including salaries, where it can be done, and used the available money to spend on more effective things.

So when the Left's high-horse riders go flying off the rails about how the flatlined level of spending should be a point of embarrassment for Obama on the accounts that spending should have risen, they are really saying that the President should have continued the wars, should have kept letting banks take a fat check for doing nothing out of federal student loans, and continued to waste money on private insurance companies and providers under Medicare. Imagine that. At least that is the logical conclusion - far more reasonable than Firestone's charge that Obama has bought into the Republican line.

By the way, let me note something else of consequence here. How did the ideologue Left reward the president for these massive targeted massive federal investments in the exact areas that is needed? They persuaded their flock to stay home in November of 2010 under the big principled stand of not-good-enough-ism, resulting in a Republican wave election, slowing down and killing much more additional needed investment. But no, it's the president's fault for pointing out the facts. Give me a freaking break.

Here's an advice for those who want to represent the Left on the media landscape, and I know they won't take it, but I'll give it anyway: do some research and run some numbers before flying off the rails. Drop the ideological pompousness, and think twice before mocking someone because they attempt to set the record straight based on ... gasp... facts.